Yesterday, the disastrous so-called Budget Control Act of 2011 became law. The law increases the US debt limit by more than $2 trillion; promises spending cuts that include defense; and creates a Super Committee of 12 who can raise taxes and cut entitlements.
Many conservatives feel dismayed and discouraged. We’ve played, peacefully, by the rules. We formed or joined TEA (Taxed Enough Already) Party groups; blogged; wrote/called the White House and our representatives in Washington, DC; and dutifully trotted to the voting booths last November 2nd. Our efforts were rewarded with a historic midterm election that voted in a tidal wave of Republicans to state governorships, to the U.S. Senate, and to form a majority in the U.S. House of Representatives.
Despite all our efforts, the Republicans in the House caved in and approved the debt deal with Obama. And so, yesterday Obama signed the bill into law.
Adding to our disillusionment is the fact that 70% of the GOP freshman class had voted to support the budget deal, among them is Florida’s Allen West. Many of the turncoats had been elected last November with the support of the Tea Party movement whose major cause is precisely that of cutting federal spending and reducing deficits.
So what do we do now?
I asked the other writers of the Fellowship to do some brainstorming. Simply and starkly, there really are only three choices: 1. Continue to work within the system:
We redouble our efforts and get ready for the 2012 elections. We vote out the GOP turncoats; re-elect those Republicans who had voted against the debt deal (go here for their names); vote for a true conservative in the Republican presidential primary; and most important of all, get Obama out of the White House! On that last task, here’s a hopeful message from political maven Dick Morris:
2. Overthrow the present corrupt system and restore the Constitution:
That’s a move never to be taken lightly, not only because of the certain losses of life and property, but also because of the uncertainty of success. As best as I know, there is not even a whiff of serious disaffection, even less of rebellion, among the U.S. military. But without the backing of the military, or at least a part of it, attempting a second American Revolution is quixotic and suicidal. 3. Drop out of the system:
We hit the bastards in the wallet and do whatever we can to cut off the flow of cash to Washington. We stop spending other than absolute necessities; do cash only transactions; cut up our credit cards; get our money out of banks, or at a minimum out of global banks and into local banks and credit unions. We circle the wagons, protect the homestead, and go into survivalist mode.
Seriously though, how many of us can or will do that?
So in the end, I keep coming back to Option One: Work Within the System. Ask yourself these questions:
Is there more I can do, in labor and dollars, to get the right people into office?
Am I in good fighting shape — physically, mentally, spiritually — for the battle? If not, get in shape!
If I am able (financially, family-wise) and have the aptitude (knowledge and understanding of politics; public speaking) to run for public office, why am I not doing it? Whom am I waiting for?
If I feel besieged, what about those House Republicans who went against their leader, that spineless RINO John Boehner, and voted against the debt deal? If your Congressman/woman is one of the 66 Samurai, send them a “Thank You” note or phonecall! (go here for the names of the 66).
Lastly, do not give in to despair. That’s a sure way for our opponents to win. There is always hope.
I welcome your suggestions, ideas, proposals. ~Eowyn
California Congressman Tom McClintock is a stalwart true conservative who’s one of 66 Republicans in the House of Representatives who did not vote for the Obama-GOP debt “compromise” bill, aka S. 365 “Budget Control Act of 2011” — a complete misnomer because the bill does NOT control the federal budget, even less reduce it.
In an e-mail to his constituents, Rep. McClintock succinctly points out what’s wrong with the bill and why he voted against it: 1. S. 365, pending Senate action, will increase the statutory debt limit by $2.1 to $2.4 trillion, the biggest explosion of debt in American history. It allows the government to avoid spending reductions for the next two years while squandering our last best hope of averting a sovereign debt crisis.
2. The purported cuts, even if realized, are far below the $4 trillion deficit reduction that credit rating agencies have warned is necessary to preserve the Triple-A credit rating of the United States Government.
3. It blows the lid off the House budget passed in April by more than a half-trillion dollars over 10 years. 4. It makes no significant spending reductions for at least the next 2 years, essentially freezing spending at an unsustainable level. While the debt increase occurs this year, deficit reductions are to be spread over many years and could be reversed by future acts of Congress. 5. The spending caps are easily circumvented by declaring appropriations to be an emergency, a response to a “major disaster,” or necessary for the “Global War on Terror.” 6. The balanced budget amendment provisions are illusory because the amendment is completely undefined.
H/t Pat Higgins. ~Eowyn
The House and Senate will be voting on the debt deal reached last night between Obama and the Republicans.
Obama and his GOP enablers say they’ll cut $2 trillion in federal govt spending over a span of TEN years. Yeah, right. If you believe that, I have a condo on Mars to sell you.
The real deal made is to increase the U.S. federal government’s debt ceiling by another $2.2 trillion, which will “tide us over” until next year’s election. All this at a time when our national debt is already $14.3 trillion and is projected to be $15 trillion by the end of this year, which will make our national debt more than 100% of America’s GDP. This is the same debt to GDP ratio of the bankrupt European PIIGS (Portugal, Ireland, Italy, Greece, Spain). The only difference between the US and the PIIGS is that there’ll be no one to bail us out.
More than ever, we need to be well-informed, have our wits, and not be bamboozled by Obama’s and the Demonrats’ scare-mongering. Investor’s Business Daily has an excellent editorial, “Five Big Debt Debate Lies,” July 29, 2o011. Here they are:
THE SKY IS FALLING! THE SKY IS FALLING!
Lie No. 1
Aug. 2 is the drop-dead deadline
This has been the White House line for months, and it’s so widely accepted that several news outlets have countdown clocks on their sites. It’s not true. The New York Times on Tuesday reported that the government will have enough cash to pay all its bills until Aug. 10. And Wells Fargo Securities chief economist John Silvia says the debt ceiling won’t be hit until sometime in September.
Lie No. 2
We risk defaulting on the debt
Despite countless warnings, there’s zero chance the federal government will default, since each month the government takes in far more in taxes and fees than it pays in interest. The White House itself, while publicly clanging the default alarm, has been privately reassuring banks that it won’t default on the debt, even if the debt ceiling isn’t raised.
Lie No. 3
Social Security payments are at risk
“I cannot guarantee that those checks go out on Aug. 3 if we haven’t resolved this issue, because there may simply not be the money in the coffers to do it,” Obama claimed earlier this month. Also a complete fabrication. In June, for example, the government took in more than $250 billion, according to Treasury’s monthly report. That was enough to pay that month’s worth of interest, plus all Social Security, Medicare, Medicaid and veterans benefits, and all Defense and Homeland Security costs, with billions of dollars left over.
Lie No. 4
A long-term debt ceiling hike is a must
Democrats refuse to sign a short-term hike, claiming that poses a risk to the economy. “A short-term extension would not provide the certainty the markets are looking for,” Senate Majority Leader Harry Reid claimed. Obama has echoed that concern. But it’s a phony connection. For example, Congress raised the debt ceiling 17 times during President Reagan’s eight years in office — an average of once every 5 1/2 months — and the economy boomed.
Lie No. 5
Obama wants a deal
We can’t prove this is a lie, but Obama’s given every indication that it is. After all, he’s done nothing to lead this to a resolution and plenty to disrupt it, all while claiming he wants an agreement. More likely, Obama thinks a debt crisis he can pin on Republicans is the path to victory in 2012.
There’s no question that failing to raise the debt ceiling in a timely fashion would be economically disruptive, if for no other reason than that the economy is so anemic it can ill afford any shock. But it’s also clear that, even if Congress misses the Tuesday deadline, the sun will still come up Aug. 3, and all these lies will be proven to be false.
To read the IBD editorial, go here. ~Eowyn
This evening (Sunday, July 31, 2011), Obama reached a compromise with Republican congressional leaders on the debt ceiling, to avoid a financial default.
Few details are available but the AP’s David Espo reports that the deal would:
Cut more than $2 trillion from federal spending over a decade. Thousands of programs – the Park Service, Labor Department and housing among them – could be trimmed to levels last seen years ago.
But the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.
No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. Both could be on the table along with changes in tax law as part of future cuts.
Taxes would be unlikely to rise.
No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package. But leaders in both parties were already beginning the work of rounding up votes.
Senate Democratic leader Harry Reid bombastically proclaimed that “in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression.”
To read the full AP article, go here.
H/t beloved fellow Anon! ~Eowyn
NewsMax.com reports Fri, July 29, 2011, 7 pm, that the Republican-controlled House passed legislation Friday night to prevent a threatened government default and bundled it off to a swift and certain defeat in the Senate. The House vote was 218-210, almost entirely along party lines.
The legislation would provide a quick $900 billion increase in U.S. borrowing authority — essential to allow the government to continue paying all its bills — along with $917 billion in cuts from federal spending.
It was rewritten hastily overnight to say that before any additional increase in the debt limit could take place, Congress must approve a balanced budget-amendment to the Constitution and send it to the states for ratification.
House Speaker John Boehner had been forced by conservative rebels in his own party to put off a scheduled vote 24 hours earlier.
But the change relating to the balanced budget amendment, a concession to tea party-backed conservatives and others, further alienated Democrats. And it diminished prospects of a compromise that can clear both houses and win Obama’s signature by next Tuesday’s deadline.
At the other end of the Capitol, Senate Democrats waited to reject the bill as swiftly as possible in a prelude to another attempt at compromise. Senate Majority Leader Harry Reid, D-Nev., had an alternative measure tocut spending by $2.2 trillion and raise the debt limit by $2.7 trillion, enough to meet Obama’s terms that it tide the Treasury over until 2013.
The White House called the bill a non-starter. “‘Amend the Constitution or default’ is a highly dangerous game to play,” said press secretary Jay Carney, and Democrats said they would scuttle it as soon as it arrived in the Senate.
The conservative Republican rebels in the House said they were more worried about stemming the nation’s steady rise of red ink. Rep. Jeff Landry, R-La., a, a first-term lawmaker, issued a statement saying his pressure had paid off.
“The American people have strongly renewed their November calls of bringing fiscal sanity to Washington. I am blessed to be a vehicle driving their wishes to fruition,” he said. “This plan is not a Washington deal but a real solution to fundamentally change the way Washington operates.”
Here is the list of the Repubs worth saving in 2012, as they voted against the Boehner debt-ceiling-increase (H/t beloved fellow Dave):
Fans of Allen West, please note that West is not on this list.
As Dave says it so well, the rest of Republicans who voted for a debt-ceiling increase can go to Hell, for all I care. ~Eowyn
“The fact that we are here today to debate raising America ‘s debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America ‘s debt weakens us domestically and internationally. Leadership means that the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” — Senator Barack H. Obama, March 2006
H/t my friend Sol. ~Eowyn
The diabolically ingenious Congress-critters have come up with an ingeniously diabolical solution to the debt ceiling impasse — go outside of the Founders’ plan and the U.S. Constitution and create a new “Super Congress” comprised of 12 men/women from both parties and both chambers of Congress.
With just a simple majority vote, this Super Congress of 12 will have extraordinary powers to push legislation through the House and Senate — powers that are NOT in the Constitution!!!
Tell your representatives “No!!!!!” ~Eowyn
Debt ceiling negotiators think they’ve hit on a solution to address the debt ceiling impasse and the public’s unwillingness to let go of benefits such as Medicare and Social Security that have been earned over a lifetime of work: Create a new Congress. This “Super Congress,” composed of members of both chambers and both parties, isn’t mentioned anywhere in the Constitution, but would be granted extraordinary new powers. Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12-member panel made up of 12 lawmakers — six from each chamber and six from each party. Legislation approved by the Super Congress — which some on Capitol Hill are calling the “super committee” — would then be fast-tracked through both chambers, where it couldn’t be amended by simple, regular lawmakers, who’d have the ability only to cast an up or down vote. With the weight of both leaderships behind it, a product originated by the Super Congress would have a strong chance of moving through the little Congress and quickly becoming law. A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits. Negotiators are currently considering cutting the mortgage deduction and tax credits for retirement savings, for instance, extremely popular policies that would be difficult to slice up using the traditional legislative process. House Speaker John Boehner (R-Ohio) has made a Super Congress a central part of his last-minute proposal, multiple news reports and people familiar with his plan say. A picture of Boehner’s proposal began to come into focus Saturday evening: The debt ceiling would be raised for a short-term period and coupled with an equal dollar figure of cuts, somewhere in the vicinity of a trillion dollars over ten years. A second increase in the debt ceiling would be tied to the creation of a Super Congress that would be required to find a minimum amount of spending cuts. Because the elevated panel would need at least one Democratic vote, its plan would presumably include at least some revenue […] Democrats are open to a series of cuts as well as a Super Congress, but only if the debt ceiling is raised sufficiently so that it pushes past the election. […] Boehner spokesman Michael Steel [So that’s where that RINO Steel went!!! -Eowyn] argued that the inability to come to a larger deal so far left a short-term extension as an “inevitable” option. “For months, we have laid out our principles to pass a bill that fulfills the president’s request to increase the debt limit beyond the next election. We have passed a debt limit increase with the reforms the American people demand, the ‘Cut, Cap, and Balance’ bill. The Democrats who run Washington have refused to offer a plan,” he said in a statement. “Now, as a result, a two-step process is inevitable. Like the president and the entire bipartisan, bicameral congressional leadership, we continue to believe that defaulting on the full faith and credit of the United States is not an option.” […]
Obama is playing a game of chicken with Congressional Republicans over the debt ceiling.
Last Monday, the U.S. government lost its ability to borrow more money because we maxed our debt limit. The Obama administration and the Dems want to raise that limit. House Republicans say “no way” — cut spending and reduce our $14+ trillion national debt first!
So tax cheat Treasury Secretary Timothy Geithner is dipping into federal retirement funds to keep funding government operations.
While this dipping is a temporary measure and, presumably, the borrowed money will be returned to the retirement programs, this may also be the Obama administration’s first move toward its plan to convert our 401(k)s and IRAs into annuities. That plan was floated as a trial balloon in January 2010. See my post “Obama, Hands Off My Retirement $.”
That is not far-fetched. Like hungry lions prowling for prey, the governments of five European countries — Hungary, Poland, Bulgaria, Ireland and France – have taken over their citizens’ private pension money to make up deficits and budget shortfalls. See my post on this here.
Most recently on May 10, 2011, the Irish government announced its plan for a 0.6% tax on private pensions to drive jobs growth. (H/t beloved fellow Joseph) ~Eowyn Zachary A. Goldfarb reports for the Washington Post, May 16, 2011: The Obama administration will begin to tap federal retiree programs to help fund operations after the government lost its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.
Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With that limit reached Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills. Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers. The measure won’t have an impact on retirees because the Treasury is legally required to reimburse the program.
The maneuver buys Geithner only a few months of time. If Congress does not vote by Aug. 2 to raise the debt limit, Geithner says the government is likely to default on some of its obligations, which he says would cause enormous economic harm and the suspension of government services, including the disbursal of Social Security funds. Many congressional Republicans, however, have been skeptical that breaching the Aug. 2 deadline would be as catastrophic as Geithner suggests. What’s more, Republican leaders are insisting that Congress cut spending by as much as the Obama administration wants to raise the debt limit, without any new taxes. Obama is proposing spending cuts and tax increases to rein in the debt.
“Everything should be on the table, except raising taxes,” House Speaker John Boehner (R-Ohio) said on CBS’s “Face the Nation.” “Because raising taxes will hurt our economy and hurt our ability to create jobs in our country.”
The Obama administration has warned that it is dangerous to make a vote on raising the debt limit contingent on other proposals. But Boehner is demanding that Congress use the debt vote as a way to bring down government spending.
“I’m ready to cut the deal today,” Boehner said. “We don’t have to wait until the 11th hour. But I am not going to walk away from this moment. We have a moment, a window of opportunity to act, because if we don’t act, the markets are going to act for us.” Geithner’s plan to tap federal retiree programs as a temporary means to avoid a government default comes as the Obama administration has shown growing interest in altering those programs to curb the debt in the long run.
Administration officials have expressed interest in raising the amount that federal employees contribute to their pensions, sources told The Washington Post.
The Republicans have suggested that the civilian workforce contribute more to its retirement in the future, effectively trimming 5 percent from salaries. The administration has not been willing to go that far in talks being led by Vice President Biden.
Treasury secretaries have tapped special programs to avoid default six times since 1985. The most protracted delay in raising the debt limit came in 1995 after congressional Republicans swept to power during the Clinton administration.
But today, the government needs far more money to cover its obligations than in the past, making the special measures less effective than they used to be. The government needs about $125 billion more a month than it takes in each month.
Read the rest of the WaPo article here.
The federal government is already nearly $14 trillion in debt (official figure). Tell the incoming 112th Congress to say no to bailouts of bankrupt cities and states, especially the still-in-denial state of California!
H/t my friend Bob W. ~Eowyn Stop the State Bailouts Before They Start
By Conn Carroll – Conservative Policy News – Dec 27, 2010
Hamtramck, Michigan, is running out of money. City Manager William Cooper tells The New York Times: “We can make it until March 1—maybe.” And Hamtramck is not alone. According to the Times, 15 municipalities have pursued bankruptcy in the past two years. And if the economy does not improve revenues, many other local governments will be in the same boat.
Many of these cities, like Hamtramck, have already cut spending on parks, senior centers, and road maintenance. But there is one area they can’t cut: salaries, benefits, and pensions of government workers. According to the Times, 60 percent of Hamtramck’s general fund goes to paying 75 current police officers and firefighters and about 240 worker and spouse pensions. “They kind of have the Cadillac plan,” Cooper tells the Times, “and we’d kind of like the Chevy.”
Reforming how police and fire workers are paid is an uphill climb politically, but polling shows that once voters are educated, they are open to change. A recent poll by the Florida League of Cities on Police and Fire Benefits found that, initially, most respondents did believe police and fire benefits were “about right” or “too low.” But when told that police officers and firefighters can retire after 20 years of service and receive 80 percent of their salaries for the rest of their lives, 66 percent of respondents strongly opposed this policy. And when asked if they knew that the retirement pay for an average police officer was over $70,000 per year, 71 percent said that was too high.
The cumulative result of these pensions and benefit promises is staggering. A recent study by Robert Novy-Marx of the University of Rochester and Joshua Rauh of Northwestern University found that major pension plans for city workers have a combined estimated under-funding of $574 billion. Heritage Foundation scholar David John details: “For instance, Chicago has only about $22 billion in pension assets to pay for $66 billion in pension promises to its city workers, while New York City has $93 billion available to pay $215 billion in city pension promises, and Boston has only $3.5 billion available to pay $11 billion in promises. That means that every household in Chicago has a liability of about $42,000 just to pay pensions to city workers, while each household in New York City owes $39,000, and each in Boston owes about $31,000.”
The problem is even worse at the state level. An earlier Novy-Marx and Rauh study of the 116 major pension plans sponsored by the 50 states found these plans had assets of about $1.8 trillion to pay pension promises of between $3.6 trillion and $5.2 trillion. This leaves a gap of between $1.8 trillion and $3.4 trillion. Unsustainable public employee compensation is a major reason why large states like California, Illinois, and New York are teetering on the brink of insolvency.
Cities like Hamtramck may eventually be able to escape their government union contracts through bankruptcy. But that road is very difficult. About half the states have laws that allow for municipal bankruptcy filings. But many set limits, including Michigan, which appears ready to force Hamtramck to borrow money from an emergency loan board before it can file for bankruptcy. But what happens when the states run out of money bailing out their local governments? States currently do not have the ability to file for bankruptcy. So what will they do?
California already came to Washington asking for an $8 billion bailout last year. The spendthrift 111th Congress said no. At a bare minimum the 112th Congress should hold the line and refuse to bailout any state government. Instead, Congress should consider a way for states to file for bankruptcy or its fiscal equivalent. While such a law would raise some serious federalism issues, as long as states are allowed to enter into bankruptcy voluntary, it could be constitutionally acceptable. But David John warns:
“Such a process should not be part of a deal under which states can also receive a federal bailout. State and local governments made the mess of their finances, and they should have to clean them up. Congress should provide a mechanism to make the process more direct, giving the states the flexibility to address their fiscal problems consistent with federalism and the principles of limited constitutional government.”